Quarterly report pursuant to Section 13 or 15(d)

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

v3.8.0.1
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
9 Months Ended
Oct. 28, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
CONDENSED CONSOLIDATING FINANCIAL INFORMATION
At October 28, 2017, the Company had outstanding $750.0 million principal amount of 5.25% Acquisition Notes due March 1, 2020 and $2,500.0 million principal amount of 5.75% Acquisition Notes due March 1, 2023, which are unsecured obligations of the Company and are also fully, unconditionally, jointly and severally guaranteed on an unsecured, unsubordinated basis, subject to certain exceptions, by certain of the Company's direct or indirect wholly-owned U.S. subsidiaries, including Family Dollar and certain of its subsidiaries. All of the subsidiaries, guarantor and non-guarantor, are 100% owned by the parent. Supplemental condensed consolidated financial information of the Company, including such information for the Guarantors, is presented below. The information is presented in accordance with the requirements of Rule 3-10 under Regulation S-X of the Securities and Exchange Commission (the "SEC"). The financial information may not necessarily be indicative of results of operations, cash flows or financial position had the guarantor or the non-guarantor subsidiaries operated as independent entities. Investments in subsidiaries are presented using the equity method of accounting. The principal elimination entries eliminate investments in subsidiaries and intercompany balances and transactions. Separate financial statements of the Guarantors are not provided as the condensed consolidating financial information contained herein provides a more meaningful disclosure to allow investors to determine the nature of the assets held by, and the operations of, the combined groups. The Company completed the exchange of the Acquisition Notes for registered notes with substantially identical terms on August 1, 2016.
Condensed Consolidating Statements of Comprehensive Income
 
 
13 Weeks Ended October 28, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
5,275.8

 
$
77.9

 
$
(37.1
)
 
$
5,316.6

Cost of sales
 

 
3,626.0

 
43.3

 
(18.7
)
 
3,650.6

Gross profit
 

 
1,649.8

 
34.6

 
(18.4
)
 
1,666.0

Selling, general and administrative
   expenses
 
1.4

 
1,224.8

 
33.1

 
(18.5
)
 
1,240.8

Operating income (loss)
 
(1.4
)
 
425.0

 
1.5

 
0.1

 
425.2

Interest expense (income), net
 
55.0

 
16.6

 
(1.9
)
 

 
69.7

Other expense, net
 

 
0.1

 
0.2

 
0.1

 
0.4

Income (loss) before income taxes
 
(56.4
)
 
408.3

 
3.2

 

 
355.1

Income tax expense (benefit)
 
(36.7
)
 
151.0

 
0.9

 

 
115.2

Equity in earnings of subsidiaries
 
(259.6
)
 
(1.8
)
 

 
261.4

 

Net income
 
239.9

 
259.1

 
2.3

 
(261.4
)
 
239.9

Other comprehensive loss
 
(2.7
)
 
(0.8
)
 
(2.8
)
 
3.6

 
(2.7
)
Comprehensive income (loss)
 
$
237.2

 
$
258.3

 
$
(0.5
)
 
$
(257.8
)
 
$
237.2

 
 
13 Weeks Ended October 29, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
4,931.4

 
$
223.3

 
$
(153.1
)
 
$
5,001.6

Cost of sales
 

 
3,427.3

 
153.2

 
(99.4
)
 
3,481.1

Gross profit
 

 
1,504.1

 
70.1

 
(53.7
)
 
1,520.5

Selling, general and administrative
   expenses
 
2.0

 
1,160.2

 
65.2

 
(49.3
)
 
1,178.1

Operating income (loss)
 
(2.0
)
 
343.9

 
4.9

 
(4.4
)
 
342.4

Interest expense (income), net
 
96.9

 
17.2

 
(1.9
)
 
(0.1
)
 
112.1

Other (income) expense, net
 
4.6

 
(0.2
)
 
0.3

 
(4.6
)
 
0.1

Income (loss) before income taxes
 
(103.5
)
 
326.9

 
6.5

 
0.3

 
230.2

Income tax expense (benefit)
 
(53.1
)
 
111.0

 
0.8

 
(0.1
)
 
58.6

Equity in earnings of subsidiaries
 
(222.0
)
 
(2.7
)
 

 
224.7

 

Net income
 
171.6

 
218.6

 
5.7

 
(224.3
)
 
171.6

Other comprehensive loss
 
(2.4
)
 
(0.7
)
 
(2.5
)
 
3.2

 
(2.4
)
Comprehensive income
 
$
169.2

 
$
217.9

 
$
3.2

 
$
(221.1
)
 
$
169.2


Condensed Consolidating Statements of Comprehensive Income (Continued)
 
 
39 Weeks Ended October 28, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
15,760.3

 
$
220.2

 
$
(95.6
)
 
$
15,884.9

Cost of sales
 

 
10,881.4

 
123.6

 
(41.0
)
 
10,964.0

Gross profit
 

 
4,878.9

 
96.6

 
(54.6
)
 
4,920.9

Selling, general and administrative
   expenses
 
4.8

 
3,649.9

 
87.3

 
(54.6
)
 
3,687.4

Operating income (loss)
 
(4.8
)
 
1,229.0

 
9.3

 

 
1,233.5

Interest expense (income), net
 
171.4

 
54.6

 
(5.8
)
 

 
220.2

Other (income) expense, net
 
(0.1
)
 
0.2

 
0.7

 

 
0.8

Income (loss) before income taxes
 
(176.1
)
 
1,174.2

 
14.4

 

 
1,012.5

Income tax expense (benefit)
 
(85.6
)
 
417.7

 
6.2

 

 
338.3

Equity in earnings of subsidiaries
 
(764.7
)
 
(10.3
)
 

 
775.0

 

Net income
 
674.2

 
766.8

 
8.2

 
(775.0
)
 
674.2

Other comprehensive income
 
2.3

 
0.7

 
2.3

 
(3.0
)
 
2.3

Comprehensive income
 
$
676.5

 
$
767.5

 
$
10.5

 
$
(778.0
)
 
$
676.5

 
 
39 Weeks Ended October 29, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidation
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net sales
 
$

 
$
14,916.6

 
$
638.4

 
$
(471.3
)
 
$
15,083.7

Cost of sales
 

 
10,385.9

 
524.0

 
(413.6
)
 
10,496.3

Gross profit
 

 
4,530.7

 
114.4

 
(57.7
)
 
4,587.4

Selling, general and administrative
   expenses
 
5.9

 
3,423.3

 
96.0

 
(56.1
)
 
3,469.1

Operating income (loss)
 
(5.9
)
 
1,107.4

 
18.4

 
(1.6
)
 
1,118.3

Interest expense (income), net
 
242.5

 
50.0

 
(5.7
)
 
(0.1
)
 
286.7

Other (income) expense, net
 
1.5

 
(0.5
)
 
0.5

 
(1.6
)
 
(0.1
)
Income (loss) before income taxes
 
(249.9
)
 
1,057.9

 
23.6

 
0.1

 
831.7

Income tax expense (benefit)
 
(117.2
)
 
369.9

 
4.6

 

 
257.3

Equity in earnings of subsidiaries
 
(707.1
)
 
(11.5
)
 

 
718.6

 

Net income
 
574.4

 
699.5

 
19.0

 
(718.5
)
 
574.4

Other comprehensive income
 
4.2

 
1.3

 
4.2

 
(5.5
)
 
4.2

Comprehensive income
 
$
578.6

 
$
700.8

 
$
23.2

 
$
(724.0
)
 
$
578.6

Condensed Consolidating Balance Sheets
 
 
October 28, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
86.9

 
$
188.0

 
$
125.2

 
$

 
$
400.1

Merchandise inventories, net
 

 
3,350.6

 
48.9

 
(1.7
)
 
3,397.8

Current deferred tax assets, net
 

 
(10.5
)
 
10.5

 

 

Due from intercompany, net
 
135.2

 
580.0

 
4.8

 
(720.0
)
 

Other current assets
 
9.2

 
163.6

 
1.6

 
0.3

 
174.7

Total current assets
 
231.3

 
4,271.7

 
191.0

 
(721.4
)
 
3,972.6

Property, plant and equipment, net
 

 
3,152.7

 
26.2

 

 
3,178.9

Assets available for sale
 

 
8.6

 

 

 
8.6

Goodwill
 

 
4,993.1

 
31.2

 

 
5,024.3

Favorable lease rights, net
 

 
398.0

 

 

 
398.0

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
4.9

 

 

 
4.9

Investment in subsidiaries
 
8,771.8

 
103.5

 

 
(8,875.3
)
 

Intercompany note receivable
 
1,801.4

 

 
188.8

 
(1,990.2
)
 

Due from intercompany, net
 
1,244.5

 

 

 
(1,244.5
)
 

Other assets
 

 
42.9

 
3.1

 
(3.1
)
 
42.9

Total assets
 
$
12,049.0

 
$
16,075.4

 
$
440.3

 
$
(12,834.5
)
 
$
15,730.2

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
165.9

 
$

 
$

 
$

 
$
165.9

Accounts payable
 

 
1,170.7

 
12.0

 
(1.4
)
 
1,181.3

Due to intercompany, net
 
593.6

 
104.7

 
21.7

 
(720.0
)
 

Other current liabilities
 
(0.8
)
 
484.5

 
209.0

 


 
692.7

Income taxes payable
 
(69.7
)
 
68.1

 
1.6

 

 

Total current liabilities
 
689.0

 
1,828.0

 
244.3

 
(721.4
)
 
2,039.9

Long-term debt, net, excluding
   current portion
 
5,241.4

 
315.6

 

 

 
5,557.0

Unfavorable lease rights, net
 

 
105.7

 

 

 
105.7

Deferred tax liabilities, net
 
1.8

 
1,470.6

 

 

 
1,472.4

Income taxes payable, long-term
 

 
45.1

 

 

 
45.1

Due to intercompany, net
 

 
1,244.5

 

 
(1,244.5
)
 

Intercompany note payable
 

 
1,990.2

 

 
(1,990.2
)
 

Other liabilities
 
0.3

 
388.3

 
8.1

 
(3.1
)
 
393.6

Total liabilities
 
5,932.5

 
7,388.0

 
252.4

 
(3,959.2
)
 
9,613.7

Shareholders' equity
 
6,116.5

 
8,687.4

 
187.9

 
(8,875.3
)
 
6,116.5

Total liabilities and equity
 
$
12,049.0

 
$
16,075.4

 
$
440.3

 
$
(12,834.5
)
 
$
15,730.2

Condensed Consolidating Balance Sheets (Continued)
 
 
January 28, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
562.4

 
$
139.2

 
$
164.8

 
$

 
$
866.4

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
2,826.3

 
41.2

 
(1.7
)
 
2,865.8

Current deferred tax assets, net
 

 
(9.3
)
 
9.3

 

 

Due from intercompany, net
 
58.7

 
1,041.5

 
42.8

 
(1,143.0
)
 

Other current assets
 
0.5

 
198.7

 
2.3

 
0.3

 
201.8

Total current assets
 
621.6

 
4,196.4

 
264.4

 
(1,144.4
)
 
3,938.0

Property, plant and equipment, net
 

 
3,085.3

 
30.5

 

 
3,115.8

Assets available for sale
 

 
9.0

 

 

 
9.0

Goodwill
 

 
4,993.1

 
30.4

 

 
5,023.5

Favorable lease rights, net
 

 
468.6

 

 

 
468.6

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.1

 

 

 
5.1

Investment in subsidiaries
 
8,640.1

 
106.6

 

 
(8,746.7
)
 

Intercompany note receivable
 
1,926.4

 

 
188.8

 
(2,115.2
)
 

Due from intercompany, net
 
1,243.8

 

 

 
(1,243.8
)
 

Other assets
 

 
41.3

 
3.3

 
(3.0
)
 
41.6

Total assets
 
$
12,431.9

 
$
16,005.4

 
$
517.4

 
$
(13,253.1
)
 
$
15,701.6

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
152.1

 
$

 
$

 
$

 
$
152.1

Accounts payable
 

 
1,105.9

 
14.7

 
(1.0
)
 
1,119.6

Due to intercompany, net
 
969.6

 
121.5

 
51.9

 
(1,143.0
)
 

Other current liabilities
 
66.4

 
470.5

 
207.3

 

 
744.2

Income taxes payable
 
(1.9
)
 
91.0

 
0.9

 

 
90.0

Total current liabilities
 
1,186.2

 
1,788.9

 
274.8

 
(1,144.0
)
 
2,105.9

Long-term debt, net, excluding
   current portion
 
5,853.9

 
315.8

 

 

 
6,169.7

Unfavorable lease rights, net
 

 
124.0

 

 

 
124.0

Deferred tax liabilities, net
 
2.0

 
1,456.9

 

 

 
1,458.9

Income taxes payable, long-term
 

 
71.2

 

 

 
71.2

Due to intercompany, net
 

 
1,243.8

 

 
(1,243.8
)
 

Intercompany note payable
 

 
2,115.2

 

 
(2,115.2
)
 

Other liabilities
 
0.3

 
377.5

 
8.0

 
(3.4
)
 
382.4

Total liabilities
 
7,042.4

 
7,493.3

 
282.8

 
(4,506.4
)
 
10,312.1

Shareholders' equity
 
5,389.5

 
8,512.1

 
234.6

 
(8,746.7
)
 
5,389.5

Total liabilities and equity
 
$
12,431.9

 
$
16,005.4

 
$
517.4

 
$
(13,253.1
)
 
$
15,701.6

Condensed Consolidating Balance Sheets (Continued)
 
 
October 29, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
ASSETS
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$

 
$
930.4

 
$
129.0

 
$
(325.6
)
 
$
733.8

Short-term investments
 

 

 
4.0

 

 
4.0

Merchandise inventories, net
 

 
3,222.3

 
47.4

 
4.2

 
3,273.9

Current deferred tax assets, net
 

 
(10.6
)
 
10.6

 

 

Due from intercompany, net
 
67.9

 
674.9

 
116.7

 
(859.5
)
 

Other current assets
 
117.3

 
209.3

 
5.7

 
(1.6
)
 
330.7

Total current assets
 
185.2

 
5,026.3

 
313.4

 
(1,182.5
)
 
4,342.4

Property, plant and equipment, net
 

 
3,143.5

 
32.8

 

 
3,176.3

Assets available for sale
 

 
11.6

 

 

 
11.6

Goodwill
 

 
4,993.1

 
29.8

 

 
5,022.9

Favorable lease rights, net
 

 
493.8

 

 

 
493.8

Tradename intangible asset
 

 
3,100.0

 

 

 
3,100.0

Other intangible assets, net
 

 
5.2

 

 

 
5.2

Investment in subsidiaries
 
9,107.7

 
102.1

 

 
(9,209.8
)
 

Intercompany note receivable
 
1,526.4

 

 
188.8

 
(1,715.2
)
 

Due from intercompany, net
 
1,699.1

 

 

 
(1,699.1
)
 

Other assets
 

 
42.4

 
4.0

 
(3.6
)
 
42.8

Total assets
 
$
12,518.4

 
$
16,918.0

 
$
568.8

 
$
(13,810.2
)
 
$
16,195.0

LIABILITIES AND EQUITY
 
 

 
 

 
 

 
 

 
 

Current liabilities:
 
 

 
 

 
 

 
 

 
 

Current portion of long-term debt
 
$
145.8

 
$

 
$

 
$

 
$
145.8

Accounts payable
 
325.7

 
1,211.7

 
52.1

 
(323.1
)
 
1,266.4

Due to intercompany, net
 
343.2

 
451.7

 
64.6

 
(859.5
)
 

Other current liabilities
 
28.8

 
485.6

 
207.6

 

 
722.0

Income taxes payable
 
3.5

 
(9.0
)
 
5.5

 

 

Total current liabilities
 
847.0

 
2,140.0

 
329.8

 
(1,182.6
)
 
2,134.2

Long-term debt, net, excluding
   current portion
 
6,621.7

 
316.3

 

 

 
6,938.0

Unfavorable lease rights, net
 

 
130.2

 

 

 
130.2

Deferred tax liabilities, net
 
1.9

 
1,493.6

 

 

 
1,495.5

Income taxes payable, long-term
 

 
72.3

 

 

 
72.3

Due to intercompany, net
 

 
1,699.1

 

 
(1,699.1
)
 

Intercompany note payable
 

 
1,715.2

 

 
(1,715.2
)
 

Other liabilities
 
0.1

 
372.3

 
8.2

 
(3.5
)
 
377.1

Total liabilities
 
7,470.7

 
7,939.0

 
338.0

 
(4,600.4
)
 
11,147.3

Shareholders' equity
 
5,047.7

 
8,979.0

 
230.8

 
(9,209.8
)
 
5,047.7

Total liabilities and equity
 
$
12,518.4

 
$
16,918.0

 
$
568.8

 
$
(13,810.2
)
 
$
16,195.0


Condensed Consolidating Statements of Cash Flows
 
 
39 Weeks Ended October 28, 2017
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net cash provided by operating activities
 
$
138.1

 
$
1,108.2

 
$
14.1

 
$
(667.8
)
 
$
592.6

Cash flows from investing activities:
 
 

 
 

 
 
 
 
 
 
Capital expenditures
 

 
(448.5
)
 
(0.9
)
 

 
(449.4
)
Proceeds from sale of restricted and
   unrestricted investments
 

 

 
4.0

 

 
4.0

Other
 

 
(0.1
)
 

 

 
(0.1
)
Net cash provided by (used in)
   investing activities
 

 
(448.6
)
 
3.1

 

 
(445.5
)
Cash flows from financing activities:
 
 

 
 

 
 
 
 
 
 
Principal payments for long-term debt
 
(610.8
)
 

 

 

 
(610.8
)
Dividends paid
 

 
(610.8
)
 
(57.0
)
 
667.8

 

Proceeds from stock issued pursuant to
   stock-based compensation plans
 
24.4

 

 

 

 
24.4

Cash paid for taxes on exercises/vesting of
   stock-based compensation
 
(27.2
)
 

 

 

 
(27.2
)
Net cash used in financing activities
 
(613.6
)
 
(610.8
)
 
(57.0
)
 
667.8

 
(613.6
)
Effect of exchange rate changes on cash and
   cash equivalents
 

 

 
0.2

 

 
0.2

Net (decrease) increase in cash and cash
   equivalents
 
(475.5
)
 
48.8

 
(39.6
)
 

 
(466.3
)
Cash and cash equivalents at beginning of
   period
 
562.4

 
139.2

 
164.8

 

 
866.4

Cash and cash equivalents at end of period
 
$
86.9

 
$
188.0

 
$
125.2

 
$

 
$
400.1

Condensed Consolidating Statements of Cash Flows (continued)
 
 
39 Weeks Ended October 29, 2016
 
 
 
 
Guarantor
 
Non-Guarantor
 
Consolidating
 
Consolidated
(in millions)
 
Parent
 
Subsidiaries
 
Subsidiaries
 
Adjustments
 
Company
Net cash provided by operating activities
 
$
290.0

 
$
660.5

 
$
36.1

 
$
(331.3
)
 
$
655.3

Cash flows from investing activities:
 
 

 
 

 
 
 
 
 
 
Capital expenditures
 

 
(450.2
)
 
(1.3
)
 

 
(451.5
)
Purchase of restricted investments
 

 
(36.1
)
 

 

 
(36.1
)
Proceeds from sale of restricted
   investments
 

 
118.1

 

 

 
118.1

Other
 

 
1.2

 

 

 
1.2

Net cash used in investing activities
 

 
(367.0
)
 
(1.3
)
 

 
(368.3
)
Cash flows from financing activities:
 
 

 
 

 
 
 
 
 
 
Principal payments for long-term debt
 
(3,258.5
)
 

 

 

 
(3,258.5
)
Proceeds from long-term debt, net of
   discount
 
2,962.5

 

 

 

 
2,962.5

Repayments of revolving credit facility
 
(140.0
)
 

 

 

 
(140.0
)
Proceeds from revolving credit facility
 
140.0

 

 

 

 
140.0

Dividends paid
 

 

 
(23.0
)
 
23.0

 

Proceeds from stock issued pursuant to
   stock-based compensation plans
 
33.3

 

 

 

 
33.3

Cash paid for taxes on exercises/vesting of
   stock-based compensation
 
(21.2
)
 

 

 

 
(21.2
)
Other
 
(6.1
)
 

 

 

 
(6.1
)
Net cash used in financing activities
 
(290.0
)
 

 
(23.0
)
 
23.0

 
(290.0
)
Effect of exchange rate changes on cash and
   cash equivalents
 

 

 
0.7

 

 
0.7

Net (decrease) increase in cash and cash
   equivalents
 

 
293.5

 
12.5

 
(308.3
)
 
(2.3
)
Cash and cash equivalents at beginning of
   period
 

 
636.9

 
116.5

 
(17.3
)
 
736.1

Cash and cash equivalents at end of period
 
$

 
$
930.4

 
$
129.0

 
$
(325.6
)
 
$
733.8